PMA A-NZ - Blog

My PMA Fresh Summit Wrap Up, by Darren Keating

Wednesday, 22 November 2017 | Posted in Industry Issues by Darren Keating

As I was booking my flights to New Orleans the images that came to mind focused on the music, food and Mardi Gras. However, when I arrived I discovered that for a few days at least, as the fresh produce industry gathered at the Produce Marketing Association (PMA) Fresh Summit convention, the whole town was focused on the fresh fruit, veg and floral industry.
When I think of Summit my mind jumps to the trade show floor, a vast spread of produce surrounded by colour and ideas and this year we were not disappointed.

I remember last year being struck by the focus on product customisation and consumer convenience. This trend has not slackened, if anything I believe its increased. Last year the vegie noodle was something home cooks were making at home, now they are available prepacked and ready to cook. The same goes for riced vegies and a growing range of vegie focused part prepared and ready to eat meals.

The growth of convenience in fresh produce is an interesting evolution to observe. The growth in this sector is obviously not a passing fad, and there is some serious technology going into providing the eating experience, consistency and food safety that surrounds these products. This year it was also notable that the marketers are focusing on getting in on the act as well. Not only are the products innovative but the brands and imagery that supports them has really stepped up this year, demanding to be seen by the consumer.

Many of the high convenience products are also branded with messages of health and well-being. As the research continues to show that most people on a western diet struggle to eat our recommended daily serves fruit and veg, or anything that should be good for us, right? But with the convenience and innovation often we see an increase in packaging, something that home in Australia consumers are vocally objecting to on sustainability grounds. It’s an interesting conundrum when the tools being used to help grow the consumption of fruits and vegetables can have a negative impact on sustainability, a theme that I’m sure industry will continue to look at in coming years.

Moving on from the trade show we heard from some great speakers at PMA Fresh Summit. Some of the presentations caught our interest were;

  • What is Amazon doing in food, in particular fresh food. With the imminent arrival of Amazon on the Australian market thus made for interesting listening. We heard that Amazon has an obsession with customer service and the difficulties they faced in moving into perishables; they are harder products to source and distribute. This meant that they had develop consumer trust in purchasing fresh produce online. To tackle this Amazon invested heavily into consumer re-education and gaining trust by telling the grower stories, while remaining focused on food safety and quality. It was noted that this process was expensive.
  • Ideas on how fresh produce businesses can work with social media influencers to grow their audience and sales. Often people think to global sporting or music stars when looking at social media campaigns. However, by knowing your product and target market, smaller companies can find social media influencers that fit their needs (and budget). This line of thinking allows smaller business to use the same principals as bigger companies but in a scaled manner that impact their target markets to great effect.
  • An issue which featured heavily in discussions throughout this year’s Fresh Summit was the future of trade with the United States and a range of trading partners. Discussions on trade all had a heavy focus towards the current renegotiations of the North American Free Trade Agreement, and the implications of the US leaving it. The concern on this trade was not only limited to businesses from the US, Canada and Mexico (those involved in NAFTA) as it is being viewed as a guide to how the US may look at other trade agreements. While this may paint a rather negative outlook on the future for trade with the US the vibe on the trade show floor from businesses all around the globe gave an entirely different view, with numbers of non-US based delegates being up on previous years. The displays were vibrant and active with business. A good example of just how positive was the projection from the Peru Export and Tourism Promotion Board that businesses from Peru had done over US$260 million in sales orders coming from the three days of Fresh Summit.

All in all, it was a great event and certainly a trade focused one. But I’d like to finish by noting the community aspect that was present at the event. So often the idea of networking and community are thrown around but this year at Fresh Summit we were able to see it in action. This year hundreds of exhibitors from Fresh Summit donated 312,490 pounds of fresh fruits and vegetables to Second Harvest Food Bank of Greater New Orleans and Acadiana, and to food banks serving hurricane victims in the Gulf Coast and Florida. Floral exhibitors also donated flowers and potted plants for distribution to food bank agencies for local hospitals. This donation was the single largest contribution of fresh produce that Second Harvest Food Bank of Greater New Orleans and Acadiana will receive this year. The food bank leads the fight against hunger in south Louisiana, providing food to 582 partners and programs across 23 parishes; it is the largest anti-hunger network in the state.

It’s great to know that the fresh produce community was able to leave such a real impact on the local community, and by working together made a difference.

Darren Keating, CEO of PMA A-NZ. Darren was appointed CEO of PMA-ANZ in September 2016 and brings youth, energy and a dynamic approach to the organisation. One of his key strengths is his ability to build positive relationships and strategic alliances with a range of stakeholders across all sectors.

All products have a story

Thursday, 23 March 2017 | Posted in Marketing by Darren Keating

Recently at a PMA A-NZ members event in Perth we heard the story of Austral Fisheries, a West Australian fishing business that has taken a product that was considered a commodity and transformed it into the premium Glacier 51 Toothfish brand, capturing the attention of top end chefs globally and raising the value from a meagre $6 per kg to well over $160 per kg. The imagery around their product shares some similarities to “Deadliest Catch”, with fish being sourced from the rugged Antarctic waters, however the real power of their marketing campaign was in their story of provenance and being able to follow the journey from the fishing grounds to the plate. This includes how they address sustainability, environmental and ethical challenges, all complimented by a product that chefs and consumers alike love. 

So what can the fresh produce industry learn from the Glacier 51 story? We may not have dramatic stories of braving the gargantuan Antarctic oceans to get our product to the table but the story of the fresh produce is no less impressive and one that consumers are keen to hear. The challenge in telling our story lies in the complexity of the supply chain however this also opens opportunities for businesses to collaborate more on bringing the journey of our humble fruit and veg all the way through to the end consumer.

Brands need to use provenance marketing to be more transparent than ever before. Consumers have an expectation that brands share more information and they are weary of what companies are hiding. To build trust and loyalty, consumers want to be informed about the whole story: the when, where, how and who. The emergence of the new generation and digital tracing technologies means that provenance and transparency will stretch out far beyond the farm gate to hold the entire supply chain accountable for the products consumers are investing their health and finances into.

Marketing starts and ends with the consumer however it will take an industry wide collaboration to sell the story of provenance in fresh produce. Research has proven that consumers value authenticity and will happily pay a premium price for a product when a brand’s connection to origin is strong. By working together to be transparent and share the story of our provenance, we gain confidence from consumers by showing that we care about health, environment, labour issues, food safety, business ethics and of course, quality.
Looking forward I can see that working together to tell the story of provenance in fresh produce will help us identify and target consumers changing needs. As demand increases for innovative products more convenient shopping options and specialised dietary requirements, more opportunities to work collaboratively and transparently will open up. Meeting the expectations of these ever-evolving customers will continue to push the need for collaboration across the whole fresh produce supply chain from grower to retailer, and everyone in between.

This May, the entire Australasian fresh produce industry will come together to build their networks, make connections and share ideas at Hort Connections in Adelaide, 15 – 17 May, 2017. This conference and tradeshow will bring together all parts of the fresh produce supply chain and open the door for a few new stories to be told.

Darren Keating, CEO of PMA A-NZ. Darren was appointed CEO of PMA-ANZ in September 2016 and brings youth, energy and a dynamic approach to the organisation. One of his key strengths is his ability to build positive relationships and strategic alliances with a range of stakeholders across all sectors.

So many opportunities but which one to pick?

Monday, 28 November 2016 | Posted in Industry Issues by Darren Keating

Since starting with the PMA A-NZ in September this year I found myself set on a steep learning trajectory with the goal of getting my head around the fresh produce industry as quickly as possible. The journey so far has not only given me a wonderful insight into how diverse the sector is, but also left me inspired by all of the options available for the fresh produce industry to innovate and grow. It has also left me wondering, with all these options available, which ones will businesses pick?

Just recently I attended the PMA Fresh Summit in Orlando Florida. While this was my first time at Fresh Summit, and I am new to the industry, I’m also a consumer (aren’t we all?). I was amazed by the range of consumer-focussed technology and innovation that was present on the trade show floor.

Product customisation was present everywhere, most noticeable in packaging type and product preparation styles. Seeing the way produce was being shaved, spiralised and cubed to give new textures and eating experiences was a real eye opener on what is possible.

Many of these products also had the added appeal of increased convenience for the consumer. This is increasingly becoming a tool of marketers to encourage people to increase their consumption of fruits and vegetables. Time and time again we hear the messages that eating plenty of fresh produce is an important part of having a healthy lifestyle but for many people this is just an aspiration. This is turning into a huge opportunity for innovations in fruit and veg to make them more accessible for a range of different meal opportunities.

The area that stood out the most to me was vegetables for snacking. Seeing vegetables presented in easy to access packaging that has them mimicking the look of junk food was a real eye opener for me. It’s also great to see that the opportunities from innovations like this can impact all levels of the supply chain, from plant breeding, growing, packing and processing right through to retail. Plant breeders working on growing smaller produce is a concept that I haven’t seen anywhere else in my career in agriculture.

Technology also played a big role in the innovation on display. We’ve all heard about smart fridges, ovens and lunch boxes, which can take photos, log meals and gather nutrition information as well as provide recipes. Personalised nutrition, where produce can be tailored to peoples taste and nutrition needs, is also firmly on the radar. A number of companies around the world are already using light spectrum technology to guarantee the sweetness of fruit for online purchasers. Who knows where this technology will go next but when you think about how many people are already collecting data on their every move with activity trackers I can easily see a time when technology tracks our food preferences or needs, which then opens the space up for a service to meet that need.

In a world where recently a person used a drone and some bulldog clips to deliver a sausage in bread from Bunnings to himself (it’s not clear if he had onions or not), something that only a few years ago would have seemed like science fiction, who knows where technology will take us.

However these opportunities pan out it seems that the industry has plenty of ways to inspire consumers to increase their fruit and vegetable consumption.

Darren Keating, CEO of PMA A-NZ. Darren was appointed CEO of PMA-ANZ in September 2016 and brings youth, energy and a dynamic approach to the organisation. One of his key strengths is his ability to build positive relationships and strategic alliances with a range of stakeholders across all sectors.

Consumer trust is a must

Monday, 19 September 2016 | Posted in Food Safety/Traceability by Michael Worthington

With some recent fairly high profile food safety incidents in our industry, it is useful to see how consumers react and ultimately to gauge the impact on the affected categories.

The packaged salad category had a major recall incident from one supplier towards the end of last summer and more recently rock melons have also been caught up in a recall. In the former, there was an instantaneous drop in sales at retail of up to 30% of sales, although wholesale sales held up well, indicating that there was not much drop off in sales in the restaurant and foodservice trade. With rockmelons, early anecdotal evidence would suggest that consumers have fairly quickly switched to other melons and the overall category has not taken too much of a hit.

According to Dr. Joanne Daly of the Australian Academy of Technological Science and Engineering, consumers’ attitudes to food safety are often defined by “values” and not necessarily by logic or information. For instance, many consumers have the view that if they buy ‘local’ or eat ‘organic’, their food will be ‘safer’, when in fact there is absolutely no evidence that this is the case. Dr. Daly adds that it largely comes down to trust and integrity (which embody traceability and reputation). It is not easy to build public trust that is consistent with real risk and yet addresses community perceptions of risk. This trust can very easily be broken by food scandals as we saw in the berries in Patties Pies case in 2015 and it takes a long time for that trust to be regained.

Food safety is very much a shared responsibility, involving the whole supply chain. For consumers, the trust they place in the outlet that they purchase their fresh produce from is paramount – they are far too removed from the source of supply to really understand the technical or technological risks that occur further back in the supply chain. Consumers largely take the view that if the product is on the retail shelf, it must be safe to eat, effectively putting their full trust in the retailer. But for the retailer, it is critical that they have trust in their growers or intermediary suppliers – and this usually involves considerable reliance on assurance schemes and auditing. Consumers also put a lot of trust in the regulators, with all research indicating that consumers do get a good level of comfort from the level of regulation that currently exists in Australia and New Zealand.

The recent conference held by the Fresh Produce Safety Centre exemplified how a whole-of-chain approach with high level of collaboration between commercial companies, industry organisations, researchers, authorities and academia is leading to outcomes that should lead to safer fresh produce. Research projects are focussed on the priority higher risk areas, students and researchers are being provided with solid opportunities in the industry and local and overseas researchers and companies are developing some outstanding technologies for better detection and prevention. There is strong collaboration across all sectors of the industry – one of the key objectives of the Fresh Produce Safety Centre –, such as the development of the Harmonised Australian Retailer Produce Scheme (HARPS). This collaboration is critical if the ‘shared responsibility’ is to be taken seriously.

Two things are needed to take food safety in fresh produce to another higher level. Firstly, there needs to be an unstinting effort on prevention. This means more research on the causes of incidents and more application of the smart new technologies that can monitor and identify risk areas. Secondly, food safety needs to be an integral part of every company’s business culture – as occupational health and safety has become. If both of these can be achieved, the ‘consumer trust’ component should simply fall into place.

 Michael Worthington, CEO of PMA A-NZ. He has more than 30 years of experience in the fresh produce industry.  To read more of Michael's blogs, please click here.

Outperform your competitors by investing more in people!

Wednesday, 14 September 2016 | Posted in Industry Issues by Michael Worthington

Earlier this year I had the opportunity to attend an excellent presentation given by Craig Boyan, the President and Chief Operating Officer of H-E-B Supermarkets (based in Texas). With 370 stores and 86,000 employees, H-E-B is one of USA’s leading independent food retailers. Whenever you hear a speaker from another country, it is always interesting to see if any comparisons can be drawn with Australian food retail and in this case there are definitely some parallels.

His presentation succinctly laid out how world (and US) consumption in the 30 years after the second World War was driven by increases in wages; this income growth fell away in the 70’s and for the next 30 years (up until quite recently), consumption has been driven almost entirely by debt, to the point where countries and individuals are now saturated in it.

So with no likely income growth and a real need to cut back on the current debt levels, Boyan is starkly forecasting the next one, two or three decades of zero or declining consumption growth, which is not good news if you are a retailer. Can comparisons be made with Australia? They most certainly can – which, on the surface, means a fairly bleak outlook for retailers.

And on top of this slow (at best) growth, for the first time ever in the USA, the amount of money spent by consumers on eating out now exceeds food grocery sales. We are not there yet in Australia, but it is inevitable that we will eventually reach the same point where foodservice spend overtakes food retail sales.

So what does Boyan see for the future of food retail (and fresh produce in particular)? He believes it comes down to three things: firstly, companies need to be unrelenting in improving their food safety practices as he sees consumer confidence keeps getting knocked by food safety incidents. Secondly, he considers fresh produce can really capitalise on the huge problem the USA is experiencing with obesity (we are not far behind). Whilst the halo effect of fresh produce is building (50% of consumers are trying to lose weight), it is taking some time to translate into increased sales volumes. In fact, 40% of children are eating less than one vegetable per day and consumers are spending less on staples like whole apples and bananas, but more on convenience-driven pre-cut fruit and vegetables and ‘snackables’ like berries and mandarins. And thirdly (and probably most tellingly), he believe that those retailers who are under-investing in their employees in the race to the bottom with cost cutting are bound to lose.

Boyan was emphatic in showing the correlation between total employee cost and retailer performance – those retailers who are investing in their people (through staff training, family support, even shareholding) and supporting local communities are outperforming retailers who seek to pay the lowest wages and benefits and return little to the community. H-E-B’s model is all based on having contented and motivated employees (who in turn are proud of the stores they work in) and actively supporting their local communities and in turn, getting well rewarded by consumers who want to shop at H-E-B.

He was adamant that, with no meaningful consumer growth over the coming years, it will all come down to out-competing the next retailer, not through price but through a business culture that is built around people and the community in which it operates.

 Michael Worthington, CEO of PMA A-NZ. He has more than 30 years of experience in the fresh produce industry.  To read more of Michael's blogs, please click here.

Older articles
Follow PMA A-NZ